UNC Hospitals makes contribution to dark money group, asks for refund after WBTV investigation

CHAPEL HILL, NC (WBTV) – The UNC Hospitals system wrote a check from a state account in January of this year that, in part, was intended to fund a dark money political organization, records obtained by WBTV show.

UNC Hospitals paid $58,633 in early January 2019 as part of a special assessment levied by the North Carolina Healthcare Association that was specifically earmarked to contribute to a 501(c)(4) group affiliated with NCHA called Partners for Innovation in Healthcare.

“Most notably, included in your dues statement is a special assessment to be used to fund ‘Partners for Innovation in Healthcare.’ This 501(c)(4) organization was founded to be a common-sense pragmatic voice for our state’s healthcare delivery system,” NCHA President Stephen Lawler wrote in a December 2018 letter about the next year’s dues to UNC Hospitals President Gary Park.

“We are committed to showing you a healthy return and hope you find that a small increase in dues for 2019 is appropriate and a solid investment,” the paragraph about the special assessment in Lawler’s letter concluded.

A copy of the NCHA invoice obtained by WBTV showed the organization billed the special assessment separately to the organization’s other dues and individual line item charges, like for ‘2019 Communications.’

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The 2019 invoice to UNC Hospitals included a line-item listed as ‘Special Assessment – Board approved one time contribution to Partners for Innovation in Health Care.’ The amount listed next to that line-item is $58,633.

A signature at the bottom of a copy of the invoice reads, “approved for payment” with a hospital executive’s signature dated December 28, 2018. It is not clear from the signature who, specifically, signed the invoice to approve the payment.

Separately, a document entitled ‘University of North Carolina Hospitals Check Request Form’ lists all items from the NCHA invoice individually, including the ‘Special Assessment’ of $58,633.

The entire amount was paid by a check cut from the UNC Hospitals account.

But in a statement issued by UNC Health Care spokesman Alan Wolf on Monday, the hospital paid the special assessment, designated for the NCHA-affiliated dark money group, by mistake.

“In paying its NCHA dues, UNC Hospitals inadvertently paid an assessment that was included on the invoice. This was an administrative oversight and has been rectified,” Wolf said in an email. “NCHA confirms it did not use UNC Hospitals funds for its 501(c)(4) organization and has since refunded that money.”

Wolf provided a copy of a check issued on Monday, June 24th confirming NCHA had refunded the money but did not provide any proof outside of a letter from NCHA that the $58,633 paid by the hospital to the NCHA was not funneled to the 504(c)(4), as indicated in both the letter from NCHA’s president, Stephen Lawler, and in the group’s invoice.

Nor could Wolf explain how the hospital inadvertently paid the line-item expense specifically intended to be funneled to the dark money group.

In multiple emails, Wolf said it was a mistake but could not identify whose signature is on the invoice from NCHA approved the hospital to pay the expense and did not provide a copy of the policies and procedures surrounding approving six-figure expenditures made by the hospital.

“From what I understand, it was simply an error, and (thanks to your email) we have corrected that error,” Wolf wrote in a follow-up email to a WBTV reporter who had asked for clarification on how an expense paid for through a line-item in a check request was paid in error.

Partners for Innovation in Healthcare, the 501(c)(4), has been used by the NCHA to push back against an effort by State Treasurer Dale Folwell to change the way in which the State Health Plan pays hospitals for state employees’ healthcare.

Folwell has announced plans to switch to a model in which the State Health Plan pays a premium over what the federal government reimburses for care. The NCHA opposes that plan.

In a tweet sent last Thursday, NCHA lobbyist Cody Hand called Partners for Innovation in Healthcare “our dark money group, which has been around for years.” The tweet linked to the dark money group’s homepage.

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But a spokeswoman for NCHA, Cynthia Charles, refused to comment on the contribution from UNC Hospitals to the dark money group—funneled through NCHA—in an email responding to a request for comment for this story.

“NCHA does not comment on dues, special assessments or other contributions that our member organizations make to other organizations so we will not provide a comment,” Charles said.

It is difficult to track how much Partners for Innovation in Healthcare has raised—or, even, who has raised the money—because the group has not obtained a charitable solicitation license, which is required for groups raising money in North Carolina.

Joyce Kohn, a fundraiser who works for the organization, said in an email late Monday afternoon that the group had not previously obtained a license because it had not raised any money.

“Partners for Innovation in Health Care, Inc. did not file a charitable solicitation license application in 2017 and 2018 because it did not engage in charitable solicitations during those years and was not required to obtain a license,” Kohn said in an email. “It will engage in charitable solicitations in 2019 and will request a charitable solicitation license this year.”

Kohn did not respond to a follow-up request from a WBTV reporter seeking clarification on how NCHA came to solicit money from its member hospitals to give to the dark money group.

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